So, jaggederest's crack is old and SharQ definitely has the facts firmly crooked. Some people don't like Microsoft and that's just fine, but that's no reason to avoid being right. For starters, advertisers did like the large customer base they could target for their newsletters but what they didn't like was that there was no way to verify that a user's information was true, nor were Hotmail or any of the other web-based email companies providing accurate statistics on how many newsletters were actually delivered and who out there was actually reading them. A company cannot make much money off advertisements when they can't tell their client how many people are actually reading their ads.
Does Sharq really believe things started to go wrong when Microsoft bought Hotmail? Oh sure, like some small-time internet start-up will really have any measure of standards compared with a company like Microsoft. Okay, so Microsoft's standards for excellence and security and trustworthiness are all pretty low, but think about it. This is Microsoft. When they screw up, there are thousands of geeks with nothing better to do than point it out.
During that time SharQ says nothing changed, a lot was changing. The code was being rewritten and the servers were being updated. Why? Well, because as he notes later, the number of users jumped from 9 million to over 130 million people actively using it everyday and the original backend for Hotmail simply could not handle that kind of load. Microsoft was buying machines, improving and standardizing code and running Hotmail through QA for the first time ever. As for the rumors about spam increasing because Microsoft sold the lists, why would they do that when they can sell these advertiser subscriptions and make more money off of that? The truth is that the user base was increasing by hundreds of thousands of people every day and spammers realized "Hey, JohnSmith isn't available as a hotmail user name, nor is JohnSmith110. That means that I can send mail to JohnSmith1 through JohnSmith110 and probably hit 100 users at least. I can do this with every name in the phone book and most words in the dictionary." And thus Hotmail because a major target for spam. A whole lot of English words and phrases were taken. Almost every name in the phone book is taken. Combinations of letters and numbers can be tried at little or no expense to the spammer with a huge return. If you don't believe me, create an account at hotmail with completely random letters and numbers mixed together and you'll get next to no spam at that account, versus 50-100 messages a day in one with just your first name.
See, here's the rub. It costs more money for Hotmail to store spam sent to 100 million users than any conceivable return from an advertiser. Why would they sell their own user lists when they will have to spend money to store the spam sent to those accounts? As for spamming the accounts themselves in order to get people to upgrade to their premium service, all you have to do is look at the spam at other large email providers and you know that hotmail isn't the only one being targeted more and more these days. 70% or more of the mail received at Hotmail each day is spam and Hotmail is taking more aggressive steps to combat it. They started with a junk mail filter and added 'levels' so that users can keep anything but mail from people in their address book from reaching their inbox and utilize a junk mail folder to catch the spam. Consider the number of people (at $50k and up a year) who must be working on fighting spam at the company. Consider $20 a year. How likely is it that Microsoft is spamming the users themselves with math like that?
Now we reach the issue of MSN Hotmail. Like all businesses, Microsoft was trying to make money off of Hotmail. Originally, Hotmail had a poor design and even worse business plan. Even if it did cost just $50,000 a year to run originally, by the time Microsoft bought it that was no longer the case. Over 130 million users and hundreds of thousands signing up each day, over 1.5 BILLION emails coming in each day, terabytes of data that need to be handled each day and pedabytes stored and all of the people needed to keep it running. Around this time, Microsoft sees Altavista and Yahoo! are both planning to charge their users for extra space, so they jump on the bandwagon. They see AOL doing so well and say to themselves "hey, if only we could turn just a small percentage of our current users into MSN customers, we'd be doing fantastic!" so Hotmail becomes part of MSN and charges for the same services those other companies charge for (though, I must point out to SharQ that virus scanning doesn't look like it will only be for the premium user accounts). Hotmail was indeed the last of the major free web-based email providers to do so. So can you really say it was simply the purchase of Hotmail by Microsoft which introduced these changes, or was it the dot com bust and the market?
Finally, reliability. Maybe four years ago the service was unreliable and emails disappeared into nothing, but the uptime lately is over 99% compared with day-long outages in the 90s. Want to know a secret? When service was unreliable at "Hotmail" 6 years ago, no one cared, but when that same service was just as unreliable, but now it was owned by Microsoft, everyone started caring and pointing and saying, "Look! See how unreliable Microsoft is?!" This forced Microsoft to improve reliability for the service. The irony is that when the service was less stable and people were pointing fingers, it wasn't running on Windows.
For the record, I'm in no way implying that Hotmail runs only on Windows ATM...